The Internet industries of America may just have inadvertently had their hats handed to them by the military industrial complex. Now it’s up to Europe to provide an alternative to the surveillance state.

Almost all of the major Internet industry giants are based in the United States. The reasons for this are historical and economical. The tradition of strong entrepreneurship practiced in the US since their inception, mixed with their purchasing power and history of acquiring any sufficiently profitable venture or fascinating technology from abroad, has put the US into a prime position to be the global leader in provision of Internet services.

That may just have ended. While US dominance over the roughly $11 trillion/year global Internet services market is still unchallenged, the damage that the revelations made about NSA’s vast global surveillance scheme may stymie their growth and perhaps even turn them into a localized recession in coming months and years.

The reason for this is Europe. While some Europeans are becoming increasingly comfortable with the notion of living in a surveillance state, most people on the European mainland still grow up hearing stories of totalitarian dictatorships, wars, genocides, and the Holocaust, and have a natural inclination to detest the notion of secret police. As more is learned of the US’s secret spying games – aided in part, it seems, by their English counterparts – outrage boils thickly in countries like France and Germany, where despite highly open and inclusive societies in some senses, the notions of privacy as practiced in the United States have often been thought of as quaint. While modern discourse on privacy is dominated by the philosophical foundations of the 4th Amendment, a slightly different, somewhat more subtle understanding of privacy reigns in European discourse, with an annoyingly elusive definition.

Over coming months and years, the US government’s betrayal of the people of the world will spur a new industry in Europe, not aimed necessarily at pure technological innovation, but rather simply creating secure, privacy-respecting alternatives to the software services provided by the US based companies that can no longer be trusted. We will see Czech and Hungarian startups bringing out new search engines and Croatian and Polish companies developing secure e-mail services. We’ll undoubtedly see surveillance-resistant chat software coming out of Austria and global map databases being developed in Estonia. Or something like that.

This is not to say that Europe is ready to take on such a massive task. There is a lot of soul-searching that needs to happen, both culturally and politically in Europe: while privacy is a shared value in most of the continent’s corners, due to the lingering fear of a return to totalitarianism – fueled in no small part by the ascension of the likes of Hungarian prime minister Viktor Orbán to power – there is still a phantom of apprehension in the interactions between the tribes that make up Europe that seems to foreshadow balkanization. On top of this we have a schizophrenic political class that speaks of free trade one minute and restrictions the next, amongst whom are those who get raging hard-ons at the merest mention of censoring pornography or anything else they find offensive or overly stimulating.

That said, this may well turn out to be Europe’s decade in tech, and all because the United States failed to heed an important and timeless warning: “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex.” Eisenhower’s parting words to a nation being enveloped in a cold war were colder still, as a man who had seen a beast grow out of hand during his years in office was urgently pointing at the writing on the wall. But the years passed and the beast grew – premonitions turning to loathsome misery with each passing President who failed to stop the surveillance state.

And now, the military-industrial complex may have destroyed the US’s Internet-industrial complex.

Just as the last two thirds of humanity are preparing to transition into cyberspace, the NSA’s actions have revealed it to be far more of a Wild West than any government feels comfortable admitting. The rule of law breaks down really fast when there’s no clear monopoly on the legitimate use of violence. There are few acts as violent as stealing everybody’s secrets. Almost two hundred countries are screaming for legitimacy, but the one that stayed the most silent – except when berating, say, Iran, for not respecting “Internet freedom” – was the one whose legitimacy had already been eradicated by their violations of the values upon which their country was founded.

Passing over Eisenhower may have been the death-knell for American democracy, but it’s exposure may sound the beginning of a new era of human rights. Those coming online for the first time a few years or decades from now may be faced with a world altogether different from the one we now live in, perhaps partly in that they will have a choice between the monitored networks of Oceania or the liberal cryptarchies of Eurasia. The market will undoubtedly have its say in what happens after that.

For now though, there is a plan emerging. The hackers and the human rights activists, the net-freedom-blah people and the technophiles have been awakening from the post-Arab spring burnout and remembering the things that need to be done to prevent the next Mubarek. Better, simpler, more usable cryptography. Peer-to-peer, verifiable, anonymous monetary systems and democratic decision making systems. Secure communications and full transparency within governance.

During the transition to this new European future, a lot of data is going to have to be stored – refugee data seeking asylum from the terrors of the Anglo-American surveillance state. While the governments of Sweden and the UK may be somewhat too eager to share the data flowing through their resident data centers with their American pals, there are a few countries, notably Iceland, who are willing to provide a strong legal environment, cheap renewable energy, and good connectivity to the rest of the world. Data centers are not the future, but they are the present, and for now there’s an amazing business opportunity out there for countries who are willing to stand up and defend data sovereignty, the notion that individuals have the right to privacy and control over the data they generate.

To those who wish to practice data sovereignty before it becomes cool, I’d say: Come to Iceland. Bring data.